It’s a sign of the challenging times in London-listed investment companies that one of the best ways of making money in the sector over the next two years is buying shares in a fund liquidating its assets and returning money to shareholders.
GCP Asset Backed Income (GABI), a debt fund, told shareholders a month ago it could make them 39% a year unravelling its £388m portfolio of mostly property loans by December 2027.
A new realisation strategy of getting money back from the real estate developers and companies it lent to from launch in 2015 was approved by shareholders in May. If successful this should shower investors with payouts totalling £405m, including annual dividends of 6.325p per share, over the next three-and-a-half years. The fund manager Gravis Capital will earn up to £14.7m in incentive fees if this is the case.
